LONDON (Alliance News) - Housebuilder stocks were rising early Wednesday, ahead of an Autumn Statement that is expected to include a pledge to build 400,000 new houses in the UK, some reportedly on the sites of inner-city Victorian prisons.
Shares of Taylor Wimpey, Persimmon, Barratt Developments and Berkeley Group Holdings were up by between 2.0% and 2.5%.
Chancellor George Osborne address Parliament starting at 1230 GMT.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 6,307.92
FTSE 250: up 0.2% at 16,985.03
AIM ALL-SHARE: up 0.1% at 729.01
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Hang Seng: closed down 0.4% at 22,498.00
Nikkei 225: closed down 0.4% at 19,847.58
DJIA: closed up 0.1% at 17,812.19
S&P 500: closed up 0.1% at 2,089.14
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GBP: up at USD1.5096 (USD1.5057)
EUR: up at USD1.0681 (USD1.0637)
GOLD: up at USD1,078.60 per ounce (USD1,074.84)
OIL (Brent): down at USD45.85 a barrel (USD46.15)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in GMT)
09:00 Italy Industrial Orders
09:30 UK BBA Mortgage Approvals
10:00 Italy Retail Sales
12:00 US MBA Mortgage Applications
12:30 UK Autumn Forecast Statement
13:30 US Personal Income and Spending
13:30 US Personal Consumption Expenditures - Price Index
13:30 US Initial and Continuing Jobless Claims
13:30 US Durable Goods Orders
14:00 US Housing Price Index
14:45 US Markit Services and Composite PMI Preliminary
15:00 US Reuters/Michigan Consumer Sentiment Index
15:00 US New Home Sales
15:30 US EIA Crude Oil Stocks
17:00 US EIA Natural Gas Storage change
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US President Barack Obama telephoned his Turkish counterpart Recep Tayyip Erdogan after Turkish forces shot down a Russian fighter jet near the Syrian border. Turkey has the right to defend its sovereignty, Obama said, and both leaders agreed that the tensions must not be allowed to escalate further, according to Obama's office. Turkey said the Sukhoi Su-24 bomber was shot down after it crossed into Turkish air space Tuesday after several warnings. Russia said the jet was in Syrian air space and was not warned. Both pilots ejected, but one was killed, with a Syrian rebel group claiming responsibility.
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French Premier Manuel Valls has called for Europe to restrict its intake of refugees from the Middle East. "Europe needs to say it can't take so many refugees. It's not possible," he told a dozen European newspapers including Germany's Sueddeutsche Zeitung, which published the remarks. The control of Europe's borders would decide the fate of the European Union, he said. "If we don't do that, then the people will say: Enough of Europe!"
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The US said it will not agree to legally constraining emission targets in any agreement that comes out of the Paris climate talks, putting Washington on a potential collision course with the EU and other countries. "We were quite convinced that an agreement requiring legally binding targets would find many countries unable to participate," US climate negotiator Todd Stern said in a press briefing. Stern said that Washington supports inclusion of other issues in the legally binding part of a new global agreement, such as how countries measure their emissions, how they report them and how they are reviewed by international teams. Talks open Monday in Paris among 196 countries seeking consensus on a new climate agreement to cover the post-2020 period.
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Bank of Japan policymaker Sayuri Shirai said core inflation is likely to rise to the 2% target by around spring 2017, a delay of about a quarter from the official projection. Core inflation will accelerate and reach about 1.7-1.8%, or rise closer to around 2% from the January to March 2017 to the April-June quarter, Shirai said. For the fiscal 2015, core inflation will be around zero %, central banker said. This slight downward revision to outlook was attributed to the fall in crude oil prices.
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BROKER RATING CHANGES
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TRADERS: HSBC CUTS ANGLO AMERICAN TO 'REDUCE' ('HOLD')
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TRADERS: HSBC INITIATES THOMAS COOK WITH 'HOLD' - TARGET 100 PENCE
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TRADERS: HSBC INITIATES MERLIN ENTERTAINMENTS WITH 'BUY' - TARGET 470 PENCE
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TRADERS: HSBC INITIATES WHITBREAD WITH 'BUY' - TARGET 5,400 PENCE
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TRADERS: HSBC INITIATES INTERCONTINENTAL HOTELS WITH 'HOLD' - TARGET 2,600 P
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S&P CAPITAL IQ RAISES DRAX GROUP TO 'BUY' ('HOLD') - TARGET 290 PENCE
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COMPANIES - FTSE 100
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Shire is preparing to make a new takeover offer for US peer Baxalta, Reuters reported, citing a source with "direct knowledge of the situation". This comes almost four months after Baxalta rejected a previous unsolicited GBP20.0 billion offer Shire made, which it argued significantly undervalued the company. Shire is working with Morgan Stanley, Evercore and Deutsche Bank on the offer, according to the report, which could be structured in cash and shares.
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Tesco could be facing disruption in its distribution network in the lead up to Christmas after a union representing workers at two hubs said it will ballot members for strike action over pay, Reuters reported. Unite said more than 700 drivers and warehouse staff at Tesco distribution centres in Belfast in Northern Ireland and in Doncaster in South Yorkshire will be balloted for strike action after the supermarket's latest pay offer was rejected. Tesco has 24 distribution centres across the UK.
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United Utilities Group said its operating profit was hit by higher costs and a water quality incident in the first half, with revenue broadly flat and its interim dividend pushed up slightly. The water utility said its operating profit for the financial half year to the end of September was down to GBP278.3 million from GBP340.5 million a year earlier, as expected, as the group was hit by higher regulated price controls, more depreciation costs, and the water quality incident which occurred in August. The company said it will pay an interim dividend of 12.81 pence per share, up from 12.56p.
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COMPANIES - FTSE 250
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Thomas Cook Group said current trading is encouraging, as it report a swing to a profit in its recently-ended financial year, with strong demand for some of its holidays offsetting disruption caused by the terrorist attack in Tunisia in June. The travel company said it made a pretax profit in the year ended September 30 of GBP50 million, having suffered a GBP114 million pretax loss the year before. Revenue fell to GBP7.83 billion from GBP8.58 billion, although it grew on a like-for-like basis. Thomas Cook will pay a dividend in early financial 2017 based on its profit for the full year.
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Britvic reported a rise in pretax profit in its recently-ended financial year, although revenue was dragged down by a weak performance in the UK and Ireland, as it named its new finance chief to the board. The soft drinks company said its pretax profit in the year ended September 27 rose to GBP147 million from GBP132.9 million the year before, although revenue did decline slightly to GBP1.30 billion from GBP1.34 billion. Britvic will pay a total dividend of 23 pence for the year, up from 20.9p the year before.
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Bookmaker Betfair Group said its pretax profit declined in the first half due to one-off effects, but its operating profit increased and its revenue rose, prompting a huge dividend hike, as it works towards completing its merger with Irish rival Paddy Power in the first quarter of 2016. Betfair said its pretax profit for the half to the end of October was GBP66.3 million, down from GBP67.3 million a year earlier due to some one-off financing expenses and a gain it made a year earlier from the sale of its stake in a joint venture not repeating. The company will pay an interim dividend of 15.0 pence per share, up from 9.0p a year earlier, a 67% rise, reflecting its strong cash flow and its higher payout ratio of 50%, set in December last year.
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Property company Daejan Holdings said its pretax profit for the first half declined sharply due to much lower valuations gains on its portfolio, while its rental income was broadly flat. Daejan said pretax profit for the half to the end of September was GBP58.8 million, compared to a GBP135.5 million profit it made a year earlier. The decline was caused by the group's property revaluation gain only coming in at GBP35.5 million in the half, compared to a GBP107.9 million gain made a year earlier. The group will pay an interim dividend of 35.00 pence per share, flat year-on-year.
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Plastic packaging company RPC Group declared an 18% improvement to its interim dividend following a rise in pretax profit in the first half, driven by much higher revenue derived from organic growth and acquisitions. The company, which makes a range of plastic containers and packaging products, said its pretax profit for the six months to the end of September was GBP40.5 million, up from GBP34.9 million a year earlier. RPC said it will pay an interim dividend of 5.2 pence per share, up from the 4.4p it paid out a year earlier.
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Indivior said late Tuesday that the US Food and Drug Administration has not to approved its new drug application for naloxone nasal spray for the treatment of opioid overdose. The FDA's response letter was focused on clinical pharmacology that found that early stage uptake of naloxone nasal spray did not fully meet the FDA's threshold. Indivior said it is evaluating the FDA's comments to determine its next steps to address the FDA's findings.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Daily Mail & General Trust reported full-year earnings in line with expectations but warned that its results for the coming year will be hurt by the sale of its stake in newspaper group Local World Holdings Ltd, as well as challenging conditions facing UK print advertising and subsidiary Euromoney Institutional Investor. For the year to end-September DMGT reported a pretax profit of GBP216.1 million, down from GBP267.0 million a year before, as a rise in revenue to GBP1.84 billion from GBP1.81 billion was offset by significant profits on disposals in the previous year that were not repeated. DMGT proposed a final dividend of 14.9 pence, taking its total dividend for the year to 21.4 pence, up from 20.4 pence a year before.
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UK Mail Group said its chief executive has stepped down by mutual agreement with immediate effect, a move that comes after the group downgraded its 2016 expectations following continued problems with its new distribution hub. UK Mail said Guy Buswell will leave the company with immediate effect and said a search for a successor has been started. Peter Kane, the company's non-executive chairman, will become interim executive chairman in the meantime.
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Paysafe Group, formerly known as Optimal Payments, said it plans to move to the London Stock Exchange's Main Market from its current listing on AIM, and expects to be eligible for inclusion in the FTSE 250 index. It expects for its trading on AIM to be cancelled December 23. The company does not plan to raise any funds or issue any new shares in relation to its admission to the main market.
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XP Power said it has acquired the business and assets of EMCO High Voltage Corp in the US for a total of USD12.0 million, funded through a new USD12.0 million term debt facility. EMCO is a designed and manufacturer of high-voltage power modules based in Northern California, and it recorded sales of USD7.9 million in 2014. XP Power said it expects the acquisition to add to earnings per share in 2016.
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COMPANIES - INTERNATIONAL
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US logistics giant FedEx has received US antitrust approval to buy European peer TNT Express. The transaction was included in a Federal Trade Commission list of transactions receiving early termination of antitrust waiting periods, according to reports. Last month, FedEx and TNT had said that they were informed by the European Commission that no statement of objections would be issued. FedEx and TNT continue to expect that the offer will close in the first half of calendar 2016.
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Hewlett-Packard released a profit for fourth quarter that fell from last year. The company said its profit dropped to USD1.7 billion, or USD0.93 per share. This was down from USD2.0 billion, or USD1.06 per share, in last year's fourth quarter. The company said revenue for the quarter fell 9.5% to USD25.7 billion. This was down from USD28.4 billion last year.
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LafargeHolcim reported that its adjusted operating EBITDA for the third-quarter declined 16% to CHF1.639 billion, from the previous year. It was down 8.9% like for like, or down 7.2% excluding CO2 sales of CHF36 million in the third quarter 2014. The company stated that its third quarter was impacted by the difficult economic context in some of its large markets, and considerable negative foreign exchange fluctuations. In addition, the closing of the merger triggered both one-off costs and organizational changes, the benefits of which will start coming through next year.
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Wednesday's Scheduled AGMs/EGMs
Plant Impact
Regenersis
MySale Group
Finsbury Food Group
Oilex
F&C UK Real Estate Investments
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
2 Mar 2016 09:35
